Labor Secretary Patricia A. Sto. Tomas today said that the non-passage of the Value Added Tax (VAT) could worsen unemployment that, according to the National Statistics Office, now stands at 4.03 million as of last January, up from 3.9 million a year ago.

The slight uptick sent the unemployment figure inching up to 11.3% of the country’s labor force, estimated at 35.7 million in January 2005, compared to 35.4 for the same period last year.

“While the 0.03% increase in unemployment on a year-on-year level may seem marginal, this is enough to cause us worry considering that hundreds of thousands more will be joining the labor force from the ranks of graduating college students next month,” said Sto. Tomas.

“Hence, we would like to strengthen the training, skills development, job creation and employment assistance programs being provided by the various offices and attached agencies of the DOLE, and this is where the additional funds that will be generated by the new VAT law will come in very handy, ” Sto. Tomas added.

The VAT bill is one of the revenue measures that the administration is pushing to generate an additional P80 billion for the state coffers to finance various government programs and help tame the budget deficit targeted at about P180 billion for this year. The labor chief said any prolonged delay in the passage of the VAT measure could negatively affect the implementation of the DOLE’s programs.

The DOLE budget for 2005 stands at P4.495 billion. This, the labor chief said is not enough to enable the department to make a big dent on the unemployment picture made worse by the forced repatriation of workers from Malaysia and the restrictions imposed by Japan on Filipino entertainers entering that country.

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